There isn’t a world where there aren’t any uncertainties. In comes actuaries, to assess the risks
Awareness about Actuarial Science or Actuarial profession continues to be limited, within the contours of high level financial professionals. This limited awareness is not restricted to India but across the globe.
“Any place where risk and uncertainty exists, actuaries have a big role to play. However, due to clustering of financial risk in the business of life insurance, general insurance, health insurance and financial investments, actuaries are more preferred to be employed in insurance, credit risk and wealth management companies,” said Dinesh Chandra Khansili, Executive Director of Institute of Actuaries of India (IAI).
“Other areas include banking, stock markets, financial product brokers and valuation of employee benefits. Data science is the new area where actuaries and actuarial students have natural inclination to excel,” he added.
He further said that actuaries at national and international level have an unparalleled advantage in all the work areas of an insurance company. “Risk management; product design and pricing; managing policy holders’ reasonable expectations relating to benefits/ bonus distribution, policy illustration, compliance, advice to other departments; solvency maintenance, mergers and acquisition, analysing the business parameters/experience are some primary functions of an actuary.”
Currently the ACET (Actuarial Common Entrance Test) is the entry gate to get eligibility to write the actuarial examination in India. A student who is good in English, Mathematics and Statistics with +2 levels can clear the ACET, though the entrance examination is not limited to only science stream students
Students study financial mathematics, finance and its reporting, probability and mathematical statistics, statistical methods, create models – deterministic and stochastic. It includes Business Economics but is not limited to developing the behaviour of interest rates.
On the role of actuaries in nation building, Mr. Khansili said, “Actuaries are helping in managing the Government of India (GoI) initiatives in providing the insurance coverage to masses under Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jan Dhan Yojana, Aam Admi Bima Yojana and various other schemes.”
“Actuaries’ role includes pricing the product, to ascertain the funds needed, analyse the experience, keep reserves, monitoring experience of scheme/products, maintaining solvency and assessing sustainability in the long run and ascertain when GoI support is needed,” he added.
“In life insurance, there is no concrete information on attrition rates. There are a number of studies undertaken in life insurance; similar studies need to be undertaken in general insurance and health insurance areas. The Appointed Actuary (AA) system is well established in life insurance business, and at the same length and breadth, the AA system needs to be established in health and general insurance industry, “explained Mr. Khansili.
Visit The Institute of Actuaries of India (IAI) website www.actuariesindia.org for further information.